Crypto startup London Block Exchange placed into compulsory liquidation
Dragon Payments Ltd., which was previously known as London Block Exchange (LBX), has been placed into compulsory liquidation, as announced on its website.
According to the announcement, the cryptocurrency exchange was placed into compulsory liquidation on Jan. 31, 200. Paul Cooper and Paul Appleton, both of David Rubin & Partners, were appointed by the Secretary of State as Joint Liquidators on Feb. 4, 2020.
The joint liquidators are already working together to resolve the customers’ concerns, particularly the recovery of the sum owed. “We will endeavor to provide a further update as soon as possible,” the message read.
According to Business Insider, LBX was launched in 2017 and raised about £2 million from a “consortium of investors.” It initially planned to roll out a sterling-to-crypto exchange and a prepaid Visa debit card to allow users to make crypto payments while shopping across the country. However, it pivoted in 2018 to become a mobile exchange for U.K. investors, CoinDesk reported.
In 2019, LBX was taken to court by one of its creditors. Benjamin Dives, who was serving as the CEO at the time, denied that it was going out of business. However, he admitted that there was a debt which was around £9,900 which was not paid on time.
“The bill didn’t come to my attention until it was very late,” Dives had said.
He added that when he became aware of the issue, he immediately sent the money to the law firm. The petition was being issued within 24 hours. At the time, Dives was confident that LBX would not go out of business and the court would decide in its favor.
“We’re getting calls from people who think we’re going out of business, but we’re not going into liquidation,” he said.
However, Peter McCormack host of “What Bitcoin Did” podcast alleged that the exchange’s debt was more than what Dives shared. McCormack alleged that the company was insolvent and it owed its creditors millions and its staff their salary since 2018.
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